GM offers Volt owners loaner cars during probe

A charging station with a Chevrolet Volt electric vehicle is displayed during a news conference where GM Ventures announced an equity investment in Sunlogics Inc, a global solar energy systems provider specializing in solar project development and installation at Sunlogics...
REUTERS/Rebecca Cook

DETROIT General Motors Co said on Monday that it will offer loaner vehicles to more than 5,000 owners of its Chevrolet Volt as it works with U.S. safety regulators on ways to reduce the risk of fires breaking out days after crashes involving the electric car.

GM executives also said the company would not deliver the Opel-branded version of the Volt in Europe until its engineers and safety regulators have worked out steps to deal with the 400-pound battery pack after any accidents.

The steps came in response to a decision last week by the National Highway Traffic Safety Administration to open a probe into the safety of the battery pack on the Volt.

A lithium-ion battery pack in a Volt that had been through a crash test in May caught fire three weeks later at a test facility in Wisconsin, NHTSA has said.

In lab tests completed last week by U.S. safety regulators, a second Volt pack began to smoke and throw off sparks while a third battery pack caught fire a week after a simulated crash.

The U.S. safety probe has threatened the reputation of a plug-in hybrid that has featured prominently in GM advertising as a symbol of the automaker's drive toward improved fuel economy.

GM executives said the Volt's battery pack would be safe during and immediately after any crash and that problems were not linked to any flaw in battery cells supplied by South Korea's LG Chem.

In order to keep Volts involved in serious accidents from catching fire later, GM engineers have been dispatched to crash sites since July to "depower" the battery packs, the company said on Monday.

GM product development chief Mary Barra likened the process to draining gasoline from a damaged gas tank after a crash. GM technicians have used the process since July after a "handful" of serious crashes, she said.

"We have now shared this process with NHTSA and are working to extend this process and the needed equipment to those who handle or store vehicles after a severe crash," she said.

Barra also said GM was looking at ways to make the design of the Volt battery pack "more robust," but declined to identify what changes those might entail.

Volt drivers can arrange for a free GM vehicle loan until the issue is resolved with NHTSA. The company sent a letter addressing the issue to its U.S. dealers and all Volt owners on Monday.

The unusual offer of a replacement GM vehicle during the safety investigation is meant to demonstrate a "white glove treatment" for owners of a car GM has described as its "moonshot," GM North America chief Mark Reuss said.

"It underlines our commitment to the vehicle and its owners," Reuss said.

The investigation into the Volt's battery comes just as GM was ready to step up production of the car. The Detroit factory that produces the Volt had been scheduled to increase output to 3,200 Volts per week from December, up from 1,600 currently.

GM Chief Executive Dan Akerson has said the Volt technology represents a breakthrough and has pushed the automaker to move faster to roll it out more broadly in his first year at the top of the automaker.

EV SLOWDOWN AHEAD?

American consumers have been slow to embrace electric and rechargeable vehicles, in part because of their additional cost. Battery safety concerns could further slow their adoption, one analysts said.

"The computer industry got by this with all the laptop fires, but then again, everybody needs a computer and not everybody needs a Volt," said Bill Visnic, an analyst with auto analysis and commentary site Edmunds.com. "If nothing else, it gives somebody not all that convinced yet another excuse."

A slower roll-out for the Volt or other electric cars could endanger President Barack Obama's goal of putting 1 million EVs on the road by 2015. To drive that goal, the Energy Department has provided about $2.5 billion in funding to battery companies, automakers and related firms.

Obama's "green economy" agenda is under fire from Republicans in Congress whose criticism has included some taxpayer-funded auto-related investments.

The Department of Energy provided $106 million in grants for GM to refurbish a Brownstown, Michigan factory where the T-shaped Volt battery packs are assembled.

Analysts said GM's quick response showed it had learned from watching rival Toyota Motor Corp take a hit to its reputation for its handling of a string of recent recalls.

By contrast, Toyota had won high praise for its handling of an early recall involving its Lexus LS400 after that luxury brand launched in 1989.

"It's actually a good move on GM's part to do this," said IHS analyst Aaron Bragman. "It shows that they recognize this is still new technology and it's going to have to be handled a little bit differently."

The Volt represented just 0.2 percent of GM's U.S. sales through October but it has remained an outsized element of the automaker's advertising, accounting for 5 to 6 percent of ad spending.

GM marketing chief Joel Ewanick said the automaker would keep its advertising plans unchanged. Some 60 percent of consumers who know about the Volt are more likely to consider buying a Chevy, Ewanick said.

"It's a great lift for Chevrolet as a brand," he said.

The Volt has a gas-powered 1.4-liter engine to provide additional range after it has run about 40 miles on a fully-charged battery. The plug-in hybrid costs $40,000 before a $7,500 federal tax credit.

Nissan Motor Co Ltd, the only major automaker with an all-electric car, the Leaf, has said its battery is different and runs cooler than the Volt battery.

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